Everything You Need to Know About Leasing
One of the biggest decisions you’ll need to make during the car buying process is deciding how to actually pay for your desired vehicle. For most consumers, that means choosing between leasing and financing. Leasing can be the better option, but it really depends on the person. Read ahead to help get yourself better acquainted with car leasing.
It Can Be Cheaper Than Buying
Leasing isn’t for everyone, but there are certain factors that make it a more attractive option than financing.
Since payments are based on the difference in the car’s value between the beginning and the end of the lease, monthly fees are cheaper than financing since you’re not paying for the entire vehicle.
You Can Drive Your Dream Car
Since leasing is cheaper, you can drive a vehicle that you may not normally be able to afford otherwise. You also have the option of getting a new luxury car quite often, since most leases don’t last longer than a few years.
You likely won’t have to spend much on maintenance fees, since newer vehicles generally don’t break down as often.
Finally, you can drive more comfortably, as you will have the privilege of using the latest safety technology with your new car.
Leasing is a Binding Contract
If you are unsure about your financial future, don’t sign up for a lease if you realistically won’t be able to afford it. Make sure to budget beforehand and ensure you’ll be able to pay for the monthly payments throughout the lifetime of the lease.
Walkaway Protection – Some dealerships such as NewRoads and NewRoads National Leasing offer Walkaway protection for the consumer covering you up to $7,500 in situations related to job loss etc. Read more about Walkaway here.
Limited KMS
When you sign your lease, there will be an agreement in place stating the number of kilometres that you’re allowed to drive per year. Dealerships will do this since they still want the car to be in fair condition when your lease eventually ends.
If you are someone who commutes long-distance, leasing is likely a less attractive option for you than a person who drives more sporadically.
There will be a penalty if you go over the specified limit and it can end up being quite expensive depending how much you override. Before you agree to anything, make sure to calculate the amount of kilometres you typically drive in a year to see if the deal makes financial sense. The bright side? You’re actually able to purchase additional kms up front if you feel you’ll need them.
Returned in Good Condition
If you are a responsible and careful driver, you shouldn’t have any problem with this one. Normal wear and tear is expected when you return the vehicle, but the dealership will have an issue if the car needs serious repairs.
If you tend to drive somewhat aggressively and find yourself at the mechanic often, you will have to eventually pay for the damage when your lease is up.
You Can Still Purchase the Vehicle After
If you really loved your vehicle, you still have the option of buying it at the end of the lease. While this is not the most cost effective way of owning a car, you can take comfort in the fact that the vehicle can still be yours if you truly enjoy it.